The whole Government intervention scheme. Which is similar to Monetarism but these theories are like siblings, both are crap.

▪Keynesians just can't let prices drop, ever (which I`m partially supporting, however let me explain *).

▪Communist style central planning with Central banks and government treasury

▪They argue against wage decrese, even in a deflationary enviroment, breaking the laws of supply & demand.

▪They basically let the government overextend, and finance everything from debt, DEFICIT SPENDING.

▪They support fractional reserve banking with a backstop of taxpayer money.

▪Basically everything is cured with debt in this theory, they just cant let the market work alone they must intervene everywhere.

▪They are in denial of reality, they don't recognize economic cycles which have been proven already many times, and if a minor recession comes along they freak out and immediately intervene, instead of having a little more realistic tolerance and let the market sort out minor flaws.It's like if you raise a child full on medication, if he gets just a light cold, you immediately give him medication, well that child when will grow up, will 100% be allergic to everything. So in the same way, if you give too much intervention in the economy, it will become allergic to them and will stay in recession  

And many many more flaws...

Now let me explain the * part.

Ok there are some markets which prices should not drop, like the stock market, however there are dozens of others which should like: food,housing,oil,etc

You can't print oranges and bananas but you can print stocks, so why not just separate these markets from eachother and not use a common denominator, a common devalued currency to price them in?

So let the food market drop and make food accesible to poor people, and let the stock market rise to make business startups easier and investors and speculators to keep happy. There is no need to mix these different markets in the same group and enviroment...

Keeping house prices artificially high is inneficient. Supplying a few homebuilders with jobs to the detriment of all young homebuyers who can't afford to buy a house from savings, but only loans, is inneficient, stupid and will not make benefits to the economy.

For example you indebt all the 20 year olds with student loan and house mortgage, how will they be a productive members of the society with all this burden of them?

Millions of people indebted versus a few thousand people's job in the housing market, which one is more important?

So you see, Keynesianism is rotten from the inside, however the elastic principle is good, not because of Keynesianism but despite of it, because it has nothing to do with it.

There is a good support @ 150$, if all hell breaks loose, atleast this level can hold.

But i dont know, Huobi ,Bitfinex and Bitstamp got some nice big juicy buy orders, so we could see a double bottom forming at 197$ and then it could rally.

However if it drops to 150$ then I will buy them all

If not then I will wait until the junk shorts clear out and buy @ 210-230

First of all "dude" elasticity is a very sound system, after all the only law in economics is that of supply & demand, everything else is just built on that.

So if you think that the central bank is the absolute only one that can do it, then why are you even here?

So you find it absolutely impossible to decentralize it? It's a joke, everything that can be done,will be done, a few years ago people wouldn't even dream of electronic money, and now they all shop with credit cards like madman.

You must be a hardcore conservative if you think this way, but then again what are you doing here in a bitcoin community with is all about open mindedness?

No I was actually talking about any market, even a stock market, you dilute the shares to prevent bubbles from popping and you recall shares if your demand drops, or just increase the dividents, there are many methods, sometimes even a PR method can fix the price.

Look what I`m saying is that you have to think outside the box, Keynesianism is BS, I say that after 6 years of studying it and + 4 years on my own.

The "aha" moment takes a lot of time and study, I can tell you many PH.D.'s that are delusioned about it, so what is their diploma worth then?

Many Keynesianist got nobel prizes, did they deserved it? It can be debated. When you are a sheep in a pack of wolves, then it's hard to be taken seriously.

So give me your educated argument, and address my points from an objective view and then we can understand eachother better.

Please explain to me how is my Elastic Monetary Policy Theory equivalent to Keynesianism?

Because I cannot see the connections.

►Keynesianism is an immoral system where 1 Central Bank dictates the monetary policy, and skew it in the favor of the upper 1%, by creating money out of thin air with 0% fractional reserve systems ,which only the banks are allowed to use.


►My Elastic Monetary Policy, is more a decentralized one, which is supports market determined interest rates, that is interest rates pegged to supply & demand, without any corrupt skewing.Inflation is necessary, but not to ease government debt, of which is used by central banks. Inflation needs to be used to halt bubbles and speculators and increase liquidity in markets, and not to ease government debt.

That is the difference my friend, so by far this has nothing to do with Keynesian BS.

Oh I didn't continued my studies, I left the university after I got my diploma which was quite a few years ago.

Yes it took me much time to realize how fake Keynesianism is. But I was always skeptical, which led me to bitcoin, otherwise I would now just be a teacher spreading more BS to poor students...


I`m not from the US, so I`m not familiar with the TARP program, but what I can tell is this.

Tax money is collateral, what do you think the FED balance sheet is made of ? Pink baloons?

They are funded by X% from government money to do their scams, the rest of it is from their own inflated money.

Last time I checked 3% reserve requirement (in my country) is pretty much a "made for collapse" economy.

Your FED has 77:1 leverage and about 0% margin requirement for smaller loans, that is the definition of money out of thin air.

Also the inflation is also a tax, because guess what, it always the poor consumer who pays more, all taxes are targeted at the middle strata or poor strata, the difference is that the poor strata gets is back from subsidies and welfare, but the middle doesnt.

AIG gave 100$ loan for every 3 dollars , they collapsed under the leverage, then the FED bailed it out, by using his own balance sheet as collateral (and also by printing money , increased taxes).

Now what is the backstop if the FED goes bankrupt (due to 77:1 leverage) ?

The IMF or World Bank ? But where do they get their funds ,from individual government subsidization who are members.

And where do the Governments get their money from?

You guessed it, taxes.

So yes, again, taxes are the collateral. End of story.

Obviously they are loans, but they use the tax money as the collateral, so if the loans default, the tax money is lost  

So it is a gift basically and a scam. As for the loan, its just money out of thin air, like the entire fractional reserve banking.

Yes I know what I`m talking about, but you are right ,this may be a little off topic  

Well all derivatives , not the main instruments, but the derivatives are there to mitigate risk.

For example a futures contract, which is just a derivative of a commodity or currency, is there to mitigate the risk of the producer and let traders hold their risk.

If a corn farm is afraid of the depreciation of their corns and thus to the loss of money, they can just make some corn futures at the current price while selling the corn later, to make sure he sells it profitable.

If the price of corn does go down then the traders who hold the risk will pay him, if not then he lost a bit of money, but atleast he can now sell his corns at a good price.

So basically the traders hold the risk in every market, but its not a forced risk, it is voluntary, everyone has to know their risk tolerance and not risk more that they can afford.

So a few traders lose, but the corn market gets saved, and the workers on the corn farm can keep their jobs, otherwise they would be fired because the corn farm would go bankrupt.

So basically a few unlucky traders sacrifice a little bit of their money to save a whole industry from volatility and collapse.

That is basically the role of derivatives.

But when the government starts to bail out wrecklessly them from taxpayer money, thats another story. Because traders voluntarly risked their money, but the taxpayer was forced to pay the taxes.Furthermore, the taxpayer is not even getting any benefit from it. Because the trader atleast has a chance to make money, but the taxpayer is permanently sentenced to lose money...

You see the difference? 

Well I`m an economist so, yes financial instruments are my toys  

It's not that hard to grasp, bitcoin will provide the basic trust needed, and you can build upon that whatever you wish.

It doesn't have to be complicated, but since no system can ever eliminate risk entirely, if you design a system, that atleast tries to do it, then it could be much more flexible than to just hope for the best.

Despite the fact that derivatives got so infamous in the 2008 crisis, they are not that of a boogieman , they are actually very very useful, if used correctly, and only then.

If a CDO is used to clean up the debt of irresponsible politicians, it's not the CDO's fault that it does that, its the politicians fault.

The CDO can also be used responsibly as an investment vehicle on smaller scales aswell. Forcing mortgages to be written into these instruments is never a good idea.

I`m for free market, but also lets face it, somebody has to clean up the mess when it all goes wrong, and its never the banker who will do it.

Alright, If you have a Counterparty address, I could send you some for free, to let you try it out, or perhaps if you are interested in helping me to promote my share, then I could give you a premium bundle for free 

Well my instrument is a double derivative, as the base instrument is the Bitcoin, BTC's derivative is the Counterparty (XCP), and my instrument GREENSTOX is a stock derivative based on Counterparty.

If somebody would create a stock option based on my GREENSTOX stock, that that would be a triple derivative 

You see you can build layer upon layers of instruments ,which could mitigate the basic risks of BTC.

If you don't like the ever decreasing price of BTC you can just create a derivative where you can short it, and hedge against the risks.

So based on this mechanism, if BTC is a savings currency, you can still create a commercial "token" or asset that can be used as a commercial currency, by adding inflation to it.

Mastercoin and Counterparty have these features, while Ethereum will also have it soon after it will be released.

You could issue 1,000,000,000 units of a derivative currency and make it inflationary, and control the price of it with this mechanism, while the base instrument would be deflationary.

Although one feature I miss from Counterparty is the lack of a "monetary base tightening" option, where you can delete X amount of units from circulation.

It has a basic "callback" feature but that is only a 1 time and you can't modify it. I would like to see a feature when you can just tighten the monetary base without restriction, and also loosen it without restriction.

I hope Ethereum will have these features.

We shall see, it will be a nice economic experiment, elasticity vs deflation, which one will win.

But to my common sense, I just can't see a comercially used currency to be deflationary, in some nasty way, devaluation does boost demand

Although Bitcoin could have a future as a partially commercial but largely savings oriented currency, where you can get loans from BTCJam or other services, and invest in it.

You could see BTC savings accounts in the future, and decentralized banks operating on the blockchain, so it's not a desperate case.

Otherwise I would not be in the bitcoin myself.

I personally just use BTC as a savings currency, but I have my own instrument GREENSTOX built on the layer of bitcoin by using Counterparty as a mediator

I really like what Counterparty did, you can just add many layers of instruments on one another and create all sorts of complicated derivatives

I`m also excited about Ethereum, they enhanced this feature even more.

So I`m very excited to create my own financial instruments, I think this is how the world should work, everything to be decentralized, not just a few crooks in CB seats to dictate the monetary policy.

Alright folks, I`ve sent out 1 wave of GREENSTOX, to 5 people requesting it at the faucet.

https://www.blockscan.com/address/18kXbKUPQVmy73dnNJNhttYcELVJX14gGs

Sorry for the delay I was not near PC, but now I`ve sent them. You will receive it in ~15 minutes depending on the transaction speed of Bitcoin

Also because you had to wait for me, I`ve sent 5 GREENSTOX not 1, to compensate for your patience, thanks!

Have a nice day!

Haha, no. The mining mechanism would be the redistribution mechanism, of course it needs to be reworked to become flexible, and not perma-inflationary.

Also don't forget about deflation, if the demand drops, a deflation algorithm would clear up X% of bitcoins from circulation, from everybody's address.

So if you got 1000 bitcoins, and a 2% "rate hike" would set in, then you would lose 20 bitcoins, however the remaining 980 bitcoins of yours would value 1000 bitcoins of the previous.

This is just to boost demand, in case of price drop, nobody would lose anything actually.

That is why we need this mechanism to prevent pump and dumping. My theory is exactly blocking the pump and dump scheme, by discouraging speculators to form bubbles.

So just decentralize it.

HFT's are not a problem, bitcoin transactions take 10 minutes to confirm, you can't HFT here, this is actually a strength of bitcoin.

UPDATE #1

PHASE 1 HAS BEGUN!

https://www.blockscan.com/assetInfo/GREENSTOX

So this means that, I am now looking for promotors who would help promote the shares, or the FAUCET which gives away free shares.

If you will help me with the promotion phase, you will get 1000 shares for free

Apply if you are interested!

Check it again, i`ve removed faucet #2.

There is only 1 faucet now.


Here is how it works, you just have to enter in the comment section there your XCP address. The faucet is self sustainable, it gains it's value from ADS.

I take absolutely no money, all of the funds that are generated from those ads, are directly sent into the profit pool of the share.

If the profits will be larger > transaction cost, then it will be send into investments, if not then at the moment will be distributed between shareholders.

Also I will need eventually to make a fundraiser to start the investment program. But at the moment i`m just giving away shares for free, so that people would know my stock.

At the moment you can get 1 SHARE/ 24 hour, I will raise the payouts as soon as the ad revenue will kick in

So don't worry about it for now.

So anyone wants to earn FREE GREENSTOX? 

If the market would remain stable, then no QE is needed, remember QE and Rate hikes are both interventionist tools.

If the market performs well, then none of them is needed, but of course we know the economy is a very delicate mechanism and nothing will be ok forever, so we need both tools to fix it.

My model, is a bottom up model, miners in the bitcoin network are not centralized, because anyone can become a miner, so the distibution resulted by QE in the bitcoin system is more fair than the Keynesian QE distribution which only consists of giving 0% loans to Wall st. and big taxes to the main street.

You still confuse the QE as a tool with the Keynesian QE. I already explained, my QE is not used for "economic stimulus" or "consumer stimulus" because that is a direct form to facilitate fractional reserve ponzis.

Since we dont have fractional system, there is no need to "stimulate" anything (with more credit card debt, student loan, etc).

The QE in my theory is only used to adjust the price to demand & supply, thats all it will do.

So no bond purchase program, to cover the welfare deficit of socialist governments, and no stock market purchase to enrich the 1% strata of speculators and banksters.

It is only used to add more liquidity and all of the generated money will be fairly redistributed

Nobody can steal any of it in a fraudulent way because all of it would be automated.

I can't emphasize it enough, because you still confuse the concept of QE with the way it's used by Keynesian con artists

That is only because the fractional reserve banking is used to support the welfare state that is promised by irresponsible politicians.

So they grow a ponzi scheme global debt bubble and use QE as a tool to ease the debt.

But Bitcoin is already a 1:1 leverage system, no fractional reserve BS. You can't compare the fiat economy to it.

In my theory the QE will only be used to control the price and stabilize it in accordance to the supply & demand mechanism.

In my theory QE won't be used to pay off the debt aquired by irresponsible governments

There is a huge difference there! 

Bitcoin QE generated money wont be used to buy bonds, it will be used to redistribute it  between the miners

1)  A)
Who said here a need for a central bank? I only said that we need a mechanism that controls the money supply, it doesn't have to be a central bank, it can be just a decentralized protocol that watches the price, an AI if you will.

We can limit the corruption and the financial frauds just simply by estabilishing a decentralized control mechanism.

But we need a control mechanism, we can't just have a Laissez faire monetary policy, it won't work.

  B)
Not even that, i`m all for 1:1 leverage loans, fractional reserve system is flawed, I said nothing about it.
Since bitcoin is international, it won't facilitate the loans of any government, it can't create loans out of thin air from fractional reserve system.

The only way to increase the monetary supply (in my theory) was to make QE after every liquidity shortage, but only then, not before not after.

The money generated from QE will be used to redistribute it between miners , who will after sell it to the market.

In the bitcoin eco-system, the miners are the reserve banks, and the central bank (if would exist) would just be a protocol built into the system, there is no need for a government agency to control the money supply, it could be all automated and decentralized.

In the same way if there is a demand shortage, then a % of bitcoins will be deleted from circulation, be removing them from everyone's wallet simultaneously.

It can be all automated, I don't imply any sort of central bank!

2) Yeah but until that happens, we will see many crashes, and bubbles, after every major positive news, suppose giant corporations adopt BTC.

Speculators will hoard in BTC again, and year 2013-2014 will happen again, nothing will change.

And after all BTC will be mined out, it will be even worse, you could see 50% increase /decrease swings daily.

It will be forever a speculative currency unfortunately :|

3) Care to elaborate on that, or do you understand how supply & demand mechanism affect the price?

I`m not even talking about when the coins will be mined, i`m talking about a bubble forming every year due to this flaw, way before all coins will be mined. But yes, i know what will happen then, massive selloff, and big crashes.

1) QE needs to be applied before crash to stabilize the price and deflate the bubble, which will prevent the crash.
Nowadays central banker wannabees do it inversely, which is stupid and irresponsible.

Stimulus package does inflate it more, you are correct, but i`m not talking about keynesian BS here, i`m talking about monetary base elasticity = monetary base adjusted to the supply/demand.

2) Inflation is not controlled, the mere fact that miners halt their progress, will create more inflation because they can mine more BTC now, is really stupid.

3) No this is not Keynesianism, it's only a principle of it, there are some good principles in the Keynesian theory, but as it is is just flawed I don't deny it, the whole central planning style economy is flawed, yes, but still, somebody needs to control the monetary supply.

That can be decentralized aswell, so i`m not advocating here central bankism, that can be a decentralized protocol aswell, but still something needs to control it, otherwise it's just chaos.


See the 2 illustrations I drawed (sorry for my poor artistic skills).

Scenario 1, with fixed monetary base (a.k.a current scenario, this is how bitcoin will end)



Scenario 2, with elastic monetary supply (monetary base adjusted directly to supply & demand)



Scenario 1 is not viable for commerce, and is fully speculative, while scenario 2 is closer to the perfect monetary policy (its nothing similar to the current monetary policy used by central bankers, it's actually the opposite)

With Scenario 2, you can just increase the monetary supply whenever there is a bubble forming (lack of supply/liquidity), and decrease it (delete X% of bitcoins from everyone's walled simultaneously), to make the bitcoin more valuable, and increase demand

I think the elastic monetary theory proposed by me is way superior to the current Bitcoin monetary policy, and to Keynesianism in general. It is the perfect monetary theory in my opinion